In the beginning where the black guy with his dog are in New York, the guys stops to watch tv. The dog runs off and bites a Godzilla. This one is about 2 feet tall. When the scene cuts, he's now biting a Godzilla much bigger than the first one!

The Godzilla doll was an inside joke that Michael Bay intentionally staged to make fun of the film by the same name which was due to be released around the same time. It sounds funny, but he played inside jokes like this a lot (he makes a cameo as a scientist). I worked on the film and was on-set when these shots were filmed and can tell you that everyone there was aware of the joke.

If you watch carefully you will see that the man selling the Godzilla dolls started to hit the dog with the big one. The dog simply lets go of the one he was attacking and begins attacking the one that he sees as attacking him.

Rrggh. I was going to add this one, but found it already here. Anyways, there was a < 2-second slot (I'd say more like 1) between the shot of the small Godzilla toy (about 1 foot) and the large toy (a blow-up type, about 5-foot). Not nearly enough time for the salesman to grab the large blowup from behind him and start whacking the dog, and then the dog to switch holds from the small one to the big one.